U.S. investigating 10 major big banks on possible precious metal price rigging

The U.S. Department of Justice and the Commodity Futures Trading Commission are investigating at least 10 major banks for possible rigging of precious-metals markets, the U.S. based economy daily Wall Street Journal reported, citing people close to the inquiries.

Justice Department prosecutors are scrutinizing the price-setting process for gold, silver, platinum and palladium in London, while the CFTC has opened a civil investigation, the newspaper said.

The banks under scrutiny are HSBC, Bank of Nova Scotia, Barclays, Credit Suisse Group AG, Deutsche Bank AG, Goldman Sachs Group Inc, JPMorgan Chase & Co, Societe Generale, Standard Bank Group Ltd and UBS AG, the newspaper said.

Reuters could not immediately reach the banks, the DoJ and the CFTC for comment outside regular business hours.

The CFTC issued a subpoena to HSBC Bank USA in January seeking documents related to the bank's precious metals trading operations, HSBC said on Monday. The DoJ also issued a request to HSBC Holdings in November seeking documents related to a criminal antitrust investigation that it is conducting in relation to precious metals, HSBC said.

Precious metal benchmarks have come under increased regulatory scrutiny since a scandal broke in 2012 over manipulation of the Libor interest rate.

HSBC was one of a number of banks named in lawsuits filed in U.S. courts last year alleging a conspiracy to manipulate gold, silver, platinum and palladium prices, plus precious metals derivatives, during the daily precious metals fixes.

The century-old gold fix is a standard price for the metal that the banks set twice a day over the telephone. A variety of gold traders claim they were harmed by a scheme to manipulate the fix.

The banks operating the precious metals benchmarks, known as the fixes, said last year that they would no longer administer that process.

An electronic daily silver price benchmark is now administered by Thomson Reuters and CME Group, while the London Metal Exchange provides twice-daily benchmark platinum and palladium prices.

ICE Benchmark Administration will run an electronic gold price benchmark from March 20 to replace the London gold fix.

In November, Switzerland's financial watchdog said it had found a "clear attempt" to manipulate precious metals price benchmarks.

German regulator Bafin, which had been conducting investigations into precious metals price-setting, said in January it was preparing to close its gold probe after not uncovering any signs of attempted benchmark price manipulation, newspaper Handelsblatt reported.